Unfortunately, credit card fraud is a growth industry

Sunday

Mar 24, 2013 at 12:01 AM

Credit card fraud is growing exponentially in the United States and is not limited to any size or type of industry, including small businesses and restaurants as well as large retailers in the Poconos.

WAYNE WITKOWSKI

Credit card fraud is growing exponentially in the United States and is not limited to any size or type of industry, including small businesses and restaurants as well as large retailers in the Poconos.

Rob Bertke, senior vice president of Research and Development for global Sage Payment Solutions that helps businesses safeguard against credit card hackers, has strongly counseled many of his company's clients about it, especially during this recovery from the recession. While the Commerce Department cites in a recent report a significant 1.1 percent rise in retail sales, the biggest uptick since September, it also means more credit card transactions and opportunities for predators. Javelin Strategy & Research recently reported an 87 percent rise in credit card fraud since 2010, which accounts for a $6 billion cumulative total loss since that time.

"It's the sophistication over the last several years that has increased," Bertke said from his office in Langley, Va. "It's well funded, professionally based at getting information."

And he says the approach may be different toward small businesses but it still gets results. With the growing popularity of mobile payment systems that have a small device added to the smartphone, that payment method also is at risk.

"Small businesses need to be on guard and aware. The scope is slightly different there," Bertke said. "It's less likely to have organized hack attempts against the system but more likely the mobile payment system not properly encrypted or a virus that can skim credit card transactions."

"Skimming," could happen in any small business where an employee grabs the numbers in submitted credit cards transactions and gets them to hackers. And businesses that store numbers in a database not properly secured can put all of those cardholders at risk.

"The reason (for the rise) is the proliferation of devices and connections through the Internet and other means increases the number of entry points into systems, creating more opportunities for hackers to get in."

Cyber security for personal computers and databases has increased in the United States but safeguards by businesses here but Bertke said it still lags behind other countries served by Sage, which handles commercial payments and business-to-business electronic commerce. The damage, he said, is not just financial but also affects the business's stature that could force it to close.

"It's absolutely true that the U.S. is behind other countries," Bertke said. "The U.S. is so large with so many old businesses so change is slower. Fraud is getting to a point where people take it seriously enough to invest against it. We're seeing more aggressive moves by the companies in the U.S. market lately than in the past."

For those who remember dining experiences of 30 years ago when it was common practice of restaurants to bring a credit card machine to your table with the bill, that trend will come back, says Bertke.

"I'll bet you two years from now every restaurant will do it that way," he said. "In Europe, they never took your credit card. They bring the terminal to your table."

Bertke recently wrote an article for his clients about the need to comply with Payment Card Industry standards and that he "strongly encourages" his business employers to have their workers take PCI certification annually.

Banks were liable for ID theft but now with debit cards, those card holders can have their money withdrawn from their accounts by a sophisticated hacker.

So not only must businesses remain alert but cardholders must be aware of the way their transaction is handled by that business.

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